Reduced Costs for Select Vehicles in India-UK Trade Through Free Trade Agreement
The India-UK Free Trade Agreement (FTA) is set to revolutionise the luxury car market in India, with significant price drops predicted for British luxury cars. Import duties on these vehicles are set to reduce from over 100% to about 10% under a phased quota system.
Key details of the FTA include a dramatic drop in import duties on Completely Built Units (CBUs) with large petrol engines (above 3000 cc) and diesel engines (above 2500 cc). These duties will decrease from over 100% to 10%, spread over five years and under a quota system. Outside the quota, tariffs on automotive imports will reduce by about 50% over a decade.
This reduction means luxury cars such as Bentley, Aston Martin, Jaguar Land Rover, and Rolls-Royce could become cheaper by up to 50% or more, potentially halving the effective import duties and bringing prices closer to their international value.
Jaguar Land Rover, especially, is expected to benefit from the FTA as it already assembles some models locally in India with lower duties (15% for CKD units), and the FTA could lead to more local assembly, further lowering prices.
Other brands set to benefit from the FTA include Bentley, which will reduce prices for its range, including the Bentayga, Continental GT, and Flying Spur. Rolls-Royce Motor Cars is also reducing prices for its luxury vehicle range, including the Phantom, Ghost, Cullinan, and the all-electric Rolls-Royce Spectre.
The Rolls-Royce Spectre will see a reduction in the import tariff after the fifth year of the India-UK FTA. Similarly, the McLaren 750S, retailed in India, will see a price reduction under the new regulations. The MINI Cooper S and Cooper S Convertible, made in the UK, are also expected to see a price reduction with the new FTA.
Aston Martin retails its cars in India, including the Vantage, DB12, Vanquish, and DBX SUV, which will get a lower import tax under the FTA. Land Rover's Range Rover and Range Rover Sport SV, fully imported in India, will become more affordable under the new India-UK FTA regulations.
The Lotus Emira sports car, retailed in India, will receive tariff benefits upfront. The Lotus Eletre and Emeya electric SUVs will see tariff benefits after the fifth year of the India-UK FTA.
Future special editions from Triumph and its made-in-India models like the Speed 400 and Scrambler 400 X should become more accessible for its UK customers. Norton Motorcycles, owned by TVS, is planning to set up shop in India towards the end of the year, with its all-new V4-powered motorcycle arriving at competitive rates.
For the 2025-2030 period, buyers can expect luxury British cars to be significantly less expensive eventually, with prices potentially dropping by half compared to earlier import duty-inflated costs. The FTA is expected to make ultra-luxury British brands more affordable and accessible to Indian buyers, especially high-net-worth individuals, while preserving their exclusivity due to the quota restrictions.
- The India-UK Free Trade Agreement (FTA) is projected to lower import duties on luxury cars, potentially causing significant price drops for British brands like Bentley, Aston Martin, Jaguar Land Rover, Rolls-Royce, McLaren, Lotus, and MINI Cooper.
- Jaguar Land Rover might benefit greatly from the FTA due to its local assembly in India, potentially resulting in lower prices and more production.
- Rolls-Royce Motor Cars' luxury vehicle range, including the Phantom, Ghost, Cullinan, and the all-electric Rolls-Royce Spectre, will experience reduced prices under the FTA.
- The Lotus Emira sports car and future electric SUVs like the Lotus Eletre and Emeya will be eligible for tariff benefits under the FTA, making them more affordable for Indian buyers.
- British brands like Triumph, Norton Motorcycles (owned by TVS), and their respective models could become more accessible for UK customers due to reduced costs under the FTA, including the Speed 400, Scrambler 400 X, and the new V4-powered motorcycle from Norton Motorcycles.
